GREENWASH CAN ENGULF A COMPANY IN PERILOUS WATER, PROF SAYS

 

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 Carol Forsloff - Can't hide forever calling yourself green and using that only as a public relations pitch some business experts say BP did, calling it a "Greenwash."

In fact NGOs named BP's "Beyond Petroleum" campaign as the winner of their "Greenwash Academy Awards."

The Indiana University Kelley School of Business says BP offers an example of the classic case of Greenwash, which is "the selective disclosure of positive information about a company's environmental performance without full disclosure of negative information on these dimensions."

"Greenwash makes sense from a business perspective as it's logical to emphasize the positive outcomes and stay away from problem areas," said John Maxwell, professor of business economics and public policy at Kelley and co-author of the analysis.

"However, as BP demonstrates, if the public comes to view a company as 'green,' there will be a high price to pay if it discovers it has been duped -- especially if the public suffers in a major way from ruined ecologies, job losses and other economic problems," Maxwell added.

The BP oil spill simply adds to the list of things activists have said about the need for companies to truly disclose their environmental and social performance as opposed to going for greenwash instead.  It hasn't, for BP, offered its intended results, Maxwell says.

 "Our study shows that increasing the pressure on companies to be more transparent often causes management to clam up rather than voluntarily disclose more," he said.

The BP type company, the greenwasher, isn't socially responsible and isn't forthcoming about because this type of company simply does not understand the impact of its activities, so researchers say activists should encourage companies to adopt environmental management systems in a way that truly integrates environmental concerns into their activities.  This way managers become aware of environmental and social impacts on what the company does and more willing to disclose more about their green and not-so-green behaviors.

"Widespread adoption of EMSs would heighten overall transparency, making it much more likely that managers would support increased disclosure," said Maxwell. "No longer would they be constrained by a lack of knowledge that breeds fear and uncertainty. In general, EMSs would help facilitate a fairer, which means more efficient, marketplace while taking positive steps toward ensuring greater environmental and social protection."